Buffett Says GM Rescue May Mean U.S. Can't Say No to States Facing Default

Discussion in 'Politics, Religion, Social Issues' started by flopticalcube, May 5, 2010.

  1. flopticalcube macrumors G4

    flopticalcube

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    #1
    http://preview.bloomberg.com/news/2...-s-can-t-say-no-to-states-facing-default.html

    Beginning to look Greekish in some states like California.
     
  2. Zombie Acorn macrumors 65816

    Zombie Acorn

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  3. Shivetya macrumors 65816

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    #3
    they will simply bailout the public employee pension systems nationwide, thereby relieving heavily pensioned states like California to dump all their largess to their government employees on other states.


    That will give California and New Jersey the headroom they need to operate. The amounts of money they pay into employee benefits and pensions is amazing. I think CA is #2 and NJ #1
     
  4. erickkoch macrumors 6502a

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    #4
    CA alone has underfunded public pension funds that are $500 billion in the hole. Where's the money going to come from?

    I live in CA but I'm sick of these bailouts. I'm afraid my state is going to end up like Greece.

    Source
     
  5. Rodimus Prime macrumors G4

    Rodimus Prime

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    #5
    Well if a state has to be bailed out then the federal goverment should be allowed to put some pretty strict controls over its budget until it is paid off. Other wise it means states will just spend themselves into a hole.

    CA being a good example. They are very spend happy but no way to pay for it. If they get bailed out they will just rinse and repeat it.
     
  6. flopticalcube thread starter macrumors G4

    flopticalcube

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    #6
    Politically, I don't think bailouts with strings attached will go down well in California. The states that are in trouble also vote for a lot of the people in DC so it will be tricky. Buffett makes a good point about the previous bailouts setting a precedent in the minds of the public. It looks bad that you can bail out Wall Street banks and large private corporations but not (albeit woefully mismanaged) states.
     
  7. Rodimus Prime macrumors G4

    Rodimus Prime

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    #7
    True. But at least CA only has 2 senators. It should be either accept it with strings attached or go bankrupt.

    I have zero trust in CA if they are bailed out not to try to correct the problem that caused it in the first place. Instead they are more likely to need to be bailed out again.
    CA is called the free lunch state for a reason. Now that it is time to pay for all those free lunches they can not afford to do so.
     
  8. Gelfin macrumors 68020

    Gelfin

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    #8
    We might well consider unf***ing our property tax fiasco for starters, if we could ever get crybaby homeowners to stop feeling like they're entitled to the imaginary numbers they were stupid enough to shell out for housing.

    Hell, just reassessing commercial properties so that, say, car dealerships that have been sitting on enormous patches of valuable property for fifty years can start pulling their weight instead of paying taxes based in 1978 would be a start.
     
  9. mactastic macrumors 68040

    mactastic

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    #9
    No way to pay for it? That's just ludicrous. There's ways to pay for it. But the "fiscally responsible" crowd will have none of it.
     
  10. mactastic macrumors 68040

    mactastic

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    #10
    It's actually called the Golden State, thanks. And the state isn't in trouble because of any free lunches, it's in trouble because of the anti-democratic nature of our budget law.
     
  11. Rodimus Prime macrumors G4

    Rodimus Prime

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    #11
    Yeah Golden state is one of it nick names but the "Free Lunch State" is another one of its many nick names.

    The point is CA is lets say not fiscally responsible at all. It is one of the worse states in the Union on that matter. The state was having budgeting problems during economic Good times due to the free lunches. Now that times are bad they are just SOL.

    From these boards I have learn from about CA is it is very easy to pass laws that spend a lot of money but near impossible to pass anything that would allow them to raise revenue. I would say if they are bailed out put strings attached to them. If and When Greece gets bailed out by the EU it is going to come with a lot of strings attached to force them to fix the budgeting problems.
     
  12. mactastic macrumors 68040

    mactastic

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    #12
    Make that string "all previous ballot initiatives are hereby declared null and void, and the ballot initiative process is hereby abandoned", and you've got a deal. That would go a long way towards solving the budget gridlock.

    And again, it's not an issue of there not being enough money around here to pay for things. It's that, as you note, it is impossible to raise revenue for anything, even the most dire of emergencies.
     
  13. chrmjenkins macrumors 603

    chrmjenkins

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    #13
    Funny enough, one of the best chances we have for raising revenue is the marijuana initiative come November.
     

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